Stocks leap as Wall Street lauds jobs growth

U.S. stock indexes ended more than 1 percent higher on Friday after strong jobs data indicated U.S. economic growth was picking up momentum, but not enough to raise concerns about an earlier-than-expected interest-rate rise by the Federal Reserve.

U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low, suggesting underlying strength in the economy at the start of the second quarter after growth hit a soft patch in the first.

"The market loved the jobs report. Couldn't have been better," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "It wasn't a strong enough number to prompt any concern by the Fed."

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May 8th Stock Market, Job Market

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Stocks leap as Wall Street lauds jobs growth

NEW YORK, NY - MAY 8: Traders work on the floor of the New York Stock Exchange (NYSE) on May 8, 2015 in New York City. Positive Jobs Reports sent the Dow Jones Industrial Average sharply higher. (Photo by Andrew Renneisen/Getty Images)

NEW YORK, NY - MAY 8: Traders work on the floor of the New York Stock Exchange (NYSE) on May 8, 2015 in New York City. Positive Jobs Reports sent the Dow Jones Industrial Average sharply higher. (Photo by Andrew Renneisen/Getty Images)

NEW YORK, NY - MAY 8: Traders work on the floor of the New York Stock Exchange (NYSE) on May 8, 2015 in New York City. Positive Jobs Reports sent the Dow Jones Industrial Average sharply higher. (Photo by Andrew Renneisen/Getty Images)

NEW YORK, NY - MAY 8: Traders work on the floor of the New York Stock Exchange (NYSE) on May 8, 2015 in New York City. Positive Jobs Reports sent the Dow Jones Industrial Average sharply higher. (Photo by Andrew Renneisen/Getty Images)

Traders gather at a post on the floor of the New York Stock Exchange Thursday, May 7, 2015. U.S. stocks are opening mostly lower, pushing the Dow Jones industrial average into the red for the year. (AP Photo/Richard Drew)

Traders work at the New York Stock Exchange, Friday, May 8, 2015 in New York. Investors are keeping a close eye on upcoming U.S. jobs figures for signs of growth in the world's largest economy. (AP Photo/Kevin Hagen)

Traders work at the New York Stock Exchange, Friday, May 8, 2015 in New York. Investors are keeping a close eye on upcoming U.S. jobs figures for signs of growth in the world's largest economy. (AP Photo/Kevin Hagen)

NEW YORK, NY - MAY 8: Traders work on the floor of the New York Stock Exchange (NYSE) on May 8, 2015 in New York City. Positive Jobs Reports sent the Dow Jones Industrial Average sharply higher. (Photo by Andrew Renneisen/Getty Images)

Nonfarm payrolls in April increased by 223,000, just below expectations, while the unemployment rate dropped despite more people entering the job market. Tempering that good news, March payrolls were revised downwards to show only 85,000 jobs created, the fewest since June 2012.

"The revision to last month is certainly significant. I think this is consistent with most of the data that has been coming out. The economy is slowing a bit, job creation is slowing a little bit," said Uri Landesman, president of Platinum Partners in New York.

Capping off a week of choppy trading that saw investors fretting about valuations and increasingly focused on interest rates, the Dow Jones industrial average .DJI rose 267.05 points, or 1.49 percent, to end at 18,191.11.

The S&P 500.SPX gained 28.10 points, or 1.35 percent, to 2,116.10 and the NasdaqComposite .IXIC added 58 points, or 1.17 percent, to 5,003.55.

The last time all three indexes gained more than 1 percent in a session was on May 1.

For the week, the Dow was up 0.9 percent, the S&P 500 was up 0.4 percent and theNasdaq was down 0.04 percent.

For six years, ultra-low borrowing costs have fueled stock gains and market participants have wondered how the U.S. market, which is trading at historically expensive valuations, will fare once the Fed begins raising interest rates.

The S&P 500 is trading at 17 times expected earnings, compared to its 10-year median average of 15, according to StarMine data.

The Dow is 0.53 percent short of its all-time high close set in early March and the S&P 500is 0.08 percent below its record high close set in April. The Nasdaq is 1.74 percent lower than its record close on April 24.